The War on Drugs: Methamphetamine

by on April 8, 2009 at 7:20 am in Economics, Medicine | Permalink

Remember when you could walk into a pharmacy and buy a decongestant like Sudafed?  The key ingredient was pseudoephedrine, a precursor to methamphetamine.  A series of laws made it more and more difficult to buy or manufacture pseudoephedrine (despite it's legality).  So what did we get for our loss of liberty?  A new paper (AEA) (free here) in the March AER says not much:   

In mid-1995, a government effort to reduce the supply of methamphetamine precursors successfully disrupted the methamphetamine market and interrupted a trajectory of increasing usage. The price of methamphetamine tripled and purity declined from 90 percent to 20 percent. Simultaneously, amphetamine related hospital and treatment admissions dropped 50 percent and 35 percent, respectively. Methamphetamine use among arrestees declined 55 percent. Although felony methamphetamine arrests fell 50 percent, there is no evidence of substantial reductions in property or violent crime. The impact was largely temporary. The price returned to its original level within four months; purity, hospital admissions, treatment admissions, and arrests approached preintervention levels within eighteen months.

The authors conclude:

This is quite possibly the DEA’s greatest success in disrupting the supply of a
major illicit substance.  The focus on disrupting the supply of inputs rather than of the drug itself proved extremely successful. This success was the result of a highly
concentrated input supply market and consequently may be difficult to replicate for drugs
with less centralized sources of supply, such as cocaine and heroin. That this massive
market disruption resulted in only a temporary reduction in adverse health events and
drug arrests and did not reduce property and violent crimes, is disappointing. (italics added)

FYI, this paper makes its case almost entirely by carefully laying out the data rather than with theory or econometrics–that was nice to see in the AER.

Andrew April 8, 2009 at 7:29 am

So, obviously, it goes without saying they re-legalized over the counter decongestants for those of us who have trouble breathing and want a good night rest so we can get up in the morning and work to save this depressing, god-forsaken society with at least some energy.

Atlas Sneezed.

Nevermind the theory that maybe, just maybe, people are coming up with these bathtub drugs and easier and easier concoctions BECAUSE other drugs are unavailable.

Robin Hanson April 8, 2009 at 8:24 am

So where is the cost-benefit analysis, assigning dollar values to the temporary usage dip, as well as to the permanent legal consumer inconvenience?

oops April 8, 2009 at 8:45 am

if you need sudafed and need some for a couple of kids during cold season make sure you bring your spouse’s id with you so that you only have to go to the store every third day

C April 8, 2009 at 9:23 am

The Economist appears to take nearly the opposite view with respect to cocaine:

Yet prohibition itself vitiates the efforts of the drug warriors. The price of an illegal substance is determined more by the cost of distribution than of production. Take cocaine: the mark-up between coca field and consumer is more than a hundredfold. Even if dumping weedkiller on the crops of peasant farmers quadruples the local price of coca leaves, this tends to have little impact on the street price, which is set mainly by the risk of getting cocaine into Europe or the United States.

Nowadays the drug warriors claim to seize close to half of all the cocaine that is produced. The street price in the United States does seem to have risen, and the purity seems to have fallen, over the past year. But it is not clear that drug demand drops when prices rise. On the other hand, there is plenty of evidence that the drug business quickly adapts to market disruption. At best, effective repression merely forces it to shift production sites. Thus opium has moved from Turkey and Thailand to Myanmar and southern Afghanistan, where it undermines the West’s efforts to defeat the Taliban.

http://www.economist.com/opinion/displaystory.cfm?story_id=13237193

Daniel Reeves April 8, 2009 at 9:46 am

1) How did it affect drug related hospital and treatment admissions in general? I would say that this is more important. Perhaps the fact that the crime rate didn’t change only shows that people went to different drugs.

2) Considering the utility of drug use for practical and recreational reasons, does this legislation pass a cost-benefit analysis? It only worked temporarily, mind you. And who knows, there may be an adverse effect from getting rid of the legislation to the point that it may never have been worth it to have the legislation.

ami April 8, 2009 at 10:11 am

on a personal note, I’m quite glad drugs containing pseudoephedrine are behind the counter. Pseudoephedrine gives me severe anxiety and panic attacks, and the increased inconvenience to customers to buy those drugs seems to have increased the number of non-pseudoephedrine alternatives available on the shelves.

Ed April 8, 2009 at 10:49 am

As other commentators have noted, this stupid prohibition had some beneficial side effects. Sudafed was a pretty poor decongestant. It always stopped working for me after taking it more than twice. The alternative decongestants developed by drug companies once sudafed was removed from the shelves are much more effective.

This is something that is worthwhile for economists to study, a case where the existance of a crappy product seems to have kept much better products off the market.

bob April 8, 2009 at 11:25 am

“The alternative decongestants developed by drug companies once sudafed was removed from the shelves are much more effective.” This just isn’t true.

Sbard April 8, 2009 at 12:02 pm

The other big effect that regulation of pseudoephedrine has had is that it has reduced the number of domestic labs making methamphetamine, which considering the environmental havoc that bathtub meth cooks tend to wreak on their surroundings, may very well be something of a positive outcome.

jason voorhees April 8, 2009 at 1:21 pm

I think all of you are confused as to which regulation the authors are studying. There were “sudafed” regulations in the early to mid 2000s that made it difficult to acquire sudafed overthe counter. But these authors are examining those regulations. This is just focused on the 1995 and 1997 federal level acts that made it difficult for distributors of single entity tables of ephedrine (and then later pseudoephedrine). These did not, to my knowledge, disrupt the market for cold medications.

Brad April 8, 2009 at 2:11 pm

As to success stories: Wasn’t the supply of Quaaludes permanently disrupted by control of the precursor chemicals?

http://www.pbs.org/wgbh/pages/frontline/meth/faqs/quaaludes.html

This lesson highlights asks another question about disruptions. Is the generic demand to ‘get high’ inelastic? Will people just switch to another substance (eventually to alcohol or inhalants obtainable legally) as one becomes unavailable? Is the entire drug war a farce?

Chris Auld April 8, 2009 at 3:12 pm

I haven’t read it carefully, but the estimates in the Rafert paper seem implausibly large. For example, in the preferred 2SLS vehicle theft model in Table 10, the estimates suggest a 10% increase in the number of meth users causes a 7.4% increase in the vehicle theft rate. That would be very large even if it were the rate of vehicles *stolen by meth users*—if the drug price goes up by 10% and the user spends, say, 10% of his income on the drug, he only needs to increase his income by 1% to cover the increased costs, but the estimate suggests that income from theft is almost unitary elastic to meth prices. But the dependent variable is the *total* vehicle theft rate, thefts by meth users and non-users, and the user thefts are probably a smallish fraction, I guess, of total thefts. The implication is user thefts and other crimes are elastic with respect to the price of meth, which strikes me as highly implausible. The analogous OLS estimate is about 30 times smaller in magnitude, with an elasticity of 0.024, which seems a lot more credible.

mulp April 8, 2009 at 4:42 pm

Given their analysis of the facts, how could the authors have used the word success in their article.

Clearly their research demonstrated that the drug efforts to control meth were a complete failure and that the free market forces were highly successful in meeting the demand.

Further, they state that the big justification for prohibiting drug use, reducing crime, is also a failure.

In other words, their research disproved the hypothesis that The War on Drugs works.

Doc Merlin April 8, 2009 at 5:30 pm

Pseudoephedrine is the only thing that seems to work for me. I’ve tried other nasal decongestants and they all fail miserably when I have a cold.

Sigivald April 8, 2009 at 7:21 pm

I’m with David Dittell. Sudafed (or equivalent generic) is the most amazing thing ever if you have a sinus infection.

Sweet, sweet 12 hour Sudafed.

(Unlike some others, I find Sudafed does keep me awake. But I’d rather take an antihistamine to fall asleep for a few days or a week and have clear sinuses than take pneylephrine and not have clear sinuses.)

(And while Sbard makes a point about environmental effects, we must remember that the other externality of importing something like 75% of illegal methamphetamine from Mexico is… enriched and emboldened drug cartels and smugglers, who import crime and destabilize Mexico.

I’d rather just make amphetamines legal and regulated like alcohol than have either meth labs or Mexican drug cartels.)

Sebastian April 9, 2009 at 11:11 am

“The alternative decongestants developed by drug companies once sudafed was removed from the shelves are much more effective.”

This combined with the people who say that Sudafed is much more effective for them than the alternatives should suggest something about the constant attack on alleged ‘me-too’ drugs. (Which by the way usually aren’t ‘me-’too’ as with a 5-10 year pipeline, if a similar drug comes out 2-3 years after a trailblazer that usually means that the other company had already been working on it for many years)

Blake April 10, 2009 at 6:23 pm

Since supply is resilient, reduce demand by treating meth-heads as people with medical problems and not criminals. How about measuring the effect of in-patient health-centers on arrests, prices, etc…

Gray May 26, 2009 at 12:36 am

Please check out Judge Jim Gray’s – End the War on Drugs.

http://www.judgejimgray.com/
http://judgejamesgray.blogspot.com/

JUDGE GRAY:

James P. Gray has been a trial judge in Orange County, California since 1983. Before becoming a judge, he served as a Volunteer in the Peace Corps in Costa Rica, a staff judge advocate and criminal defense attorney in the Navy JAG Corps, a federal prosecutor in Los Angeles, and a civil litigation attorney in a private law firm, in addition to being a Republican candidate for US Congress in 1998, and a Libertarian candidate for US Senate in 2004. Judge Gray has discussed issues of drug policy on more than two hundred television and radio shows and public forums all across the country. Using his experience on the bench and elsewhere, he has also authored a book on the failed War on Drugs, another Wearing The Robe, about practical and ethical issues in being a judge, and has composed a musical that encourages young people to expand their horizons and live a fuller life. Read more about Judge Jim Gray.

Zillina November 8, 2010 at 11:01 am

people today seem to embrace the concept of “abuse”… they like a lot to abuse anything that can be abused: drugs, cigarettes, alcohol… you name it… so if the law is wrong or seems to be without logic… that is because of people without a limit… Drug rehab Sacramento

scott88 January 24, 2011 at 6:03 pm

There is a residential drug rehab in every city in this country that has several meth addicts for clients. This problem does not seem to be going away. Maybe the meth – aka spraak, gib, tik, or geek – is being manufactured in Mexico, where pseudoephedrine is still legal, and smuggled across the border. Maybe….

TheFlickster February 23, 2011 at 7:15 am

I just read an article about this issue on the Buy Phentermine website and let me tell you that this might be a success, but I want to know if people have started choosing other drugs instead of the one they managed to get off the market… This is a very good question and I do expect answers as well…

Comments on this entry are closed.

Previous post:

Next post: